Donor Advised Fund (DAF)

What is it?

A Donor Advised Fund (DAF) provides a structure that can simplify charitable contributions and grow tax-free. This type of Fund has the flexibility to support diverse charitable interests that the donor recommends.

Best for- Individuals, couples or families that want to:

Maximize employer charitable matching programs;

Separate the timing of their tax-deductible activity from the timing of gifts to particular causes/nonprofits; and

Generally, be more strategic with the resources they want to use to support the community.

What Are the Benefits?

TAX-FREE GROWTH

If you choose to have your Fund invested at CTCF, any gains achieved by the Fund are tax-free growth that you can use to further support charitable organizations. Each month you will receive a report showing the activity of your Fund, tracking both deposits and distributions. *Past returns are no guarantee of future performance.

DOUBLE your GIVING

A Donor Advised Fund (DAF) at CTCF qualifies as a recipient of an employer charitable matching program. Check with your employer to determine if they have a charitable matching program and how much they match annually.

Gifts that Keep Giving

In lieu of birthday, anniversary or holiday gifts, invite family and friends to donate to your Fund, and then experience the joy of giving to organizations that address the community needs most meaningful to you!

Avoid Capital Gains or Ordinary TAX

If you have proceeds from a stock sale that you are planning to donate, be sure to consider gifting the stock directly to your Fund. Instead of selling the stock, paying taxes and then being left with a smaller amount to donate, verify how long you have owned the stock. You may not have to pay capital gains tax if you have owned the stock longer than one year or ordinary tax if less than one year when you gift the stock directly to your Fund.

Simplify your TAX Deductions

If you are leveraging an employer charitable matching program, any donations from your paycheck (initiated by you, via your employer) to your Fund will be included in your W-2 at the end of the year. This simplifies your giving by reducing the nonprofit donation letters you would normally have to keep track of in order to include them as tax deductions!

How do I establish a Donor Advised Fund?

You will need to fill out the “Fund Agreement” which includes choosing a unique name for your Fund. The Fund Agreement outlines the parameters of your Fund, and areas such as the following are covered:

Who are the primary advisors for the Fund?

Will the Fund support a variety of charitable interests or do you have a particular field of interest you would like to support?

Does your Fund meet the requirements AND do you want the Fund to be invested?

Administrative costs for a DAF.

To review a copy of the Fund Agreement or for more information about a Donor Advised Fund, call or email Julie Johnson at (512) 863-4186 or juliejohnson@chisholm-trail.org.

While we share giving concepts, we do not provide legal, tax or financial advice.